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P2P Loans and bank loans, the chicken and the egg, what causes what?: further evidence from a bootstrap panel granger causality test

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  • Zan Zhang
  • Ken Hung
  • Tsangyao Chang

Abstract

This study attempts to re-investigate the causal link between bank loans and Peer-to-Peer (P2P) loans from China using data sets from eight areas (i.e., Beijing, Shanghai, Jiangsu, Zhejiang, Shandong, Hubei, Guangdong and Sichuan) over 2014M1-2016M4. We apply a bootstrap panel causality analysis that considers both cross-dependency and heterogeneity across cities. The empirical results indicate a unidirectional Granger causality running from P2P loans to bank loans for Beijing, Shanghai, Zhejiang and Shandong; feedback between P2P loans and bank loads for Jiangsu only and independence for the other three areas (i.e. Hubei, Guangdong and Sichuan).

Suggested Citation

  • Zan Zhang & Ken Hung & Tsangyao Chang, 2017. "P2P Loans and bank loans, the chicken and the egg, what causes what?: further evidence from a bootstrap panel granger causality test," Applied Economics Letters, Taylor & Francis Journals, vol. 24(19), pages 1358-1362, November.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:19:p:1358-1362
    DOI: 10.1080/13504851.2017.1279261
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    References listed on IDEAS

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    2. Jiang, Cuixia & Xu, Qifa & Zhang, Weiming & Li, Mengting & Yang, Shanlin, 2018. "Does automatic bidding mechanism affect herding behavior? Evidence from online P2P lending in China," Journal of Behavioral and Experimental Finance, Elsevier, vol. 20(C), pages 39-44.
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    4. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2023. "Cross‐regional comparative study on digital finance and finance efficiency in China: The eastern and non‐eastern areas," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 68-83, January.
    5. Chen, Yuxuan & Chiu, Junmao & Chung, Huimin, 2022. "Givers or Receivers? Return and volatility spillovers between Fintech and the Traditional Financial Industry," Finance Research Letters, Elsevier, vol. 46(PB).

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